[Hague-jur-commercial-law] Snipped story from BNA International on the Hague

[Manon Anne Ress]

June 2004

HAGUE CONFERENCE

Delegates Narrow Differences Prior to Diplomatic Conference

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Long-Term Effort Bears Fruit

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Article 1, which addresses the scope of the convention, now contains a 
statement clarifying that the convention applies in international cases. 
Article 1, Section 2, states that: “ … a case is international unless 
... the parties are resident in the Contracting State of the court 
seised and the relationship of the parties and all other elements 
relevant to the dispute, regardless of the location of the chosen court, 
are connected only with that state.”

Before the latest negotiations, there was no such language in the draft. 
While delegates agreed on including language directing that the 
convention would apply to international cases, just what types of 
agreements take precedence over others is an issue that remains to be 
resolved.

IP Provisions Remain Controversial

Article 2 includes the list of proceedings to which the convention does 
not apply, including those to which a consumer is a party, or those 
relating to employment contracts. The language describing other excluded 
matters, primarily intellectual property proceedings, was revised 
somewhat after government experts who met at the U.S. Patent and 
Trademark Office proposed revisions to the Article’s language.

Article 2, Section 2(j) now states that the convention shall not apply 
to matters involving “the validity, nullity, or dissolution of legal 
persons, and the validity of decisions of their organs” Article 2, 
Section 2(k), which deals with the issue whether intellectual property 
rights should be included or excluded from the convention, is bracketed 
because of continuing disagreements over its wording. It now states that 
the convention shall not apply to “[intellectual property rights other 
than copyright or related rights, except in proceedings pursuant to a 
contract which licenses or assigns such intellectual property rights 
[including proceedings for infringement of the right to which the 
contract relates].]”
Subsection (k) is still among the most controversial provisions. Several 
delegations have disagreed as to whether the section should remain open 
or closed to future additions of intellectual property rights. Some 
delegates believe that intellectual property cases should be excluded 
completely from the convention because they are too complicated or are 
too nationally based.

Jurisdiction Wording Settled

Another convention provision considered important is Article 5, which 
addresses “Jurisdiction of the chosen court”. Subsection 1 states: “The 
court or courts of a Contracting State designated in an exclusive choice 
of court agreement shall have jurisdiction to decide a dispute to which 
the agreement applies, unless the agreement is null and void under the 
law of that State.”

Subsection 2 adds: “A court that has jurisdiction under paragraph 1 
shall not decline to exercise jurisdiction on the ground that the 
dispute should be decided in a court of another State.”
The fact that delegates agreed on this language is significant, given 
the tendencies by different countries’ delegations to argue for various 
exceptions during the long course of the negotiations.

Debate Continues Over Article 7

Article 7 (formerly Article 5) continues to be the subject of much 
debate. Titled “Obligations of a court not chosen” (formerly Article 5), 
it provides that if parties have entered into an exclusive 
choice-of-court agreement, a court in a contracting state other than the 
state of the chosen court must suspend or dismiss the proceedings, 
subject to certain exceptions. Some interest groups have argued that 
courts in contracting states other than the state of the chosen court 
should not be required to suspend or dismiss proceedings in cases where 
serious injustice might result.

As revised, Article 7(a) provides that if the parties have entered into 
an exclusive choice-of-court agreement, any court in a contracting state 
other than that of the chosen court shall suspend or dismiss the 
proceedings unless “the agreement is null and void under the law of the 
State of the chosen court”.
In this draft, a footnote was added to this section, which states that 
“the policy issues related to this matter need further consideration”. 
The note details three different options proposed by various delegates 
as to how subsection (a) should read after the word “unless”. They state:
i) giving effect to the agreement would lead to a very [delete: very] 
serious injustice or would [otherwise] be manifestly contrary to 
fundamental principles of public policy of the State of the court seised;
ii) under the mandatory rules on jurisdiction of the State of the court 
seised, the parties were unable to agree to exclude the jurisdiction of 
the courts of this State; and
iii) giving effect to the agreement would be manifestly contrary to 
public policy of the State of the court seised.

The footnotes indicate that there remain different views among the 
delegations as to how much flexibility the convention should allow, and 
under what circumstances a court not specifically designated by the 
parties should be permitted to consider the case.

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Published by BNA International Inc.


-- 
Manon Anne Ress
Consumer Project on Technology
www.cptech.org
PO Box 19367, Washington, DC 20036
manon.ress@cptech.org, voice: 1.202.387.8030, fax: 1.202.234.5176